Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds
and declares that:

a. While the cost of
housing in New Jersey has declined under currently eroding economic conditions,
the cost of both renting and homeownership remains unaffordable to a large
percentage of New Jersey residents, including those who make vital
contributions to their communities such as teachers, nurses, police officers,
firefighters, and the general workforce population;

b. In recognition of this
crisis, Governor Jon S. Corzine has committed to producing and preserving
100,000 units of affordable housing for low-, moderate- and middle-income
families and individuals over the next 10 years;

c. According to the 2000
U.S. Census, 55 percent of these families are one and two person households,
many of which are unable to find homes and apartments designed to meet their
needs;

d. While no policy is
singularly responsible for current housing conditions, zoning practices have
resulted in a lack of land approved for housing which meets the needs of
households requiring smaller housing units;

e. The shortage of
affordably priced workforce housing has been exacerbated in recent years by a
municipal preference for age-restricted housing which has resulted in an
oversupply of age-restricted housing approvals and an inability among the
majority of New Jersey’s workforce to live near their jobs;

f. While the Legislature
has created a State Housing Commission, which has been charged with reviewing
New Jersey’s housing limitations and its future needs to create a balanced
housing policy and plan appropriate for all New Jerseyans, it has not yet
commenced operation;

g. Although the maximum
municipal percentage of affordable fair share housing which may be met by
age-restricted units in a municipality has been reduced from 50 percent to 25
percent under the recently adopted rules of the Council on Affordable Housing,
a mechanism is needed to permit 1[a proposed]an1 age-restricted
development to change to a 1[non-restricted]converted1
development to meet this rule, and to meet demographic needs; and

h. Under currently
deteriorating national economic conditions, it is appropriate to take immediate
action at this time to create the opportunity to increase the production and
supply of workforce housing through the conversion of the over-supplied
age-restricted market to meet the needs of New Jersey’s residents who require
smaller, more reasonably priced homes.

2. As used in P.L. ,
c. (C. ) (pending before the Legislature as this bill):

“Affordable” means a sales
price or rent which meets the criteria for low income or moderate income
housing, as defined in section 4 of P.L.1985, c.222 (C.52:27D-304).

“Approving board” means the
municipal or regional planning board, zoning board of adjustment, or joint land
use board that issued the initial site plan or subdivision approvals for the
given age-restricted development.

“Age-restricted development”
means a community that complies with the “housing for older persons” exception
from the federal “Fair Housing Amendments Act of 1988,” Pub.L.100-430 (42
U.S.C. ss.3601 et seq.) for that community as set forth in section 100.301 of
Title 24, Code of Federal Regulations.

"Attached housing"
means housing units that share a common wall.

“Converted development” means
a proposed age-restricted development that will be marketed instead with no age
restrictions.

“Department” means the
Department of Community Affairs.

“Developer” means the legal or
beneficial owner or owners of a lot or of any land proposed to be included in a
proposed development, including the holder of an option or contract to
purchase, or other person having an enforceable proprietary interest in such
land.

2"Floor area
ratio" means the floor area of all buildings and structures on a lot
divided by the lot area.2

“Fair share plan” means the plan
that describes the mechanisms and the funding sources, if applicable, by which
a municipality proposes to address its affordable housing obligation as
established in the housing element, and includes the draft ordinances necessary
to implement that plan in accordance with section 10 of P.L.1985, c.222
(C.52:27D-310) and the regulations adopted by the Council on Affordable Housing
to effectuate that section.

“Final approval” has the same meaning
as defined in the “Municipal Land Use Law,” P.L.1975, c.291 (C.40:55D-1 et
seq.).

“Municipality” means any city,
borough, town, township, or village.

“Non-restricted 1[development”]status1 means 1the status of1 an age-restricted
development that has 1[been changed to an open
market development where the age restriction has been eliminated]received approval to
become a converted development1.

“Preliminary approval” has the
same meaning as defined in the “Municipal Land Use Law,” P.L.1975, c.291 (C.40:55D-1
et seq.).

“Residential Site Improvement
Standards” means the technical site standards promulgated by the Commissioner
of Community Affairs pursuant to the authority of P.L.1993, c.32
(C.40:55D-40.1).

3. a. During the period of
time set forth in section 9 of P.L. , c.
(C. ) (pending before the Legislature as this bill), any age-restricted
development shall be eligible to be changed to a 1[non-restricted]converted1 development,
pending approving board approval, provided that the development meets all of
the following conditions:

(1) preliminary or final
approval for construction of the development has been granted prior to the
effective date of P.L. , c. (C. )
(pending before the Legislature as this bill);

(2) the developer of the
age-restricted 1[community]development1 is not holding a
deposit for 1[the sale of], or has not
conveyed,1
any dwelling unit within the development;

(3) the developer of the
age-restricted 1[community]development1 agrees that an
amount not exceeding 20 percent of the units in the development will be
provided as affordable units in accordance with regulations promulgated by the
Council on Affordable Housing pursuant to the “Fair Housing Act,” P.L.1985,
c.222 (C.52:27D-301 et al.).

b. Any 1[affordable]housing1 unit which is
provided under the provisions of P.L. , c. (C. ) (pending before
the Legislature as this bill) 1,
and which is affordable to households of low- and moderate income,1 shall
automatically become part of a municipal fair share plan, if applicable, and as
such shall be eligible for credits to meet the municipality’s obligation for
affordable housing pursuant to the “Fair Housing 1[Act.”]Act,” P.L.1985, c.
222 (C.52:27D-301 et al.).1

c. No affordable housing
units complying with applicable Council on Affordable Housing standards or
market-rate housing units associated with such a converted development shall be
construed as generating any 2[growth]fair2 share affordable
housing obligation for a municipality.

4. a. A developer seeking
to change an age-restricted development approval to a converted development
approval shall file an application with the approving board seeking an
amendment to the previously granted approvals requesting the authority to
develop the land as a converted development. At such time, the developer shall
also file a copy of said notice with the municipal clerk of the municipality in
which the development is located and the developer shall provide notice prior
to a hearing on the application in the manner prescribed by section 7.1 of
P.L.1975, c.291 (C.40:55D-12).

(1) No application for an
amended approval seeking the authority to construct a converted development
shall be considered a “use variance” or other “’d’ variance” application pursuant
to subsection d. of section 57 of P.L.1975, c.291 (C.40:55D-70). Both planning
boards that initially granted approvals for the age-restricted development and
zoning boards of adjustment that initially granted approvals for the
age-restricted development shall have the legal authority to grant amended
approvals for a converted development without the need to seek relief pursuant
to subsection d. of section 57 of P.L.1975, c.291 (C.40:55D-70), it being the
intent of this bill that such converted developments are to be considered
permitted uses in the zoning district in which they are located.

b. Applications seeking
amended approval for a converted development shall include documentation that
all of the following site improvement and infrastructure requirements have been
met:

(1) the site meets the
Residential Site Improvement Standards parking requirement for the residential
land uses in a converted development as established pursuant to N.J.A.C.5:21-4.14-4.16;

(2) the recreation
improvements and other amenities to be constructed on the site have been
revised, as needed, to meet the needs of a converted development;

(3) the water supply system
is adequate, as determined pursuant to N.J.A.C.5:21-5.1, to meet the needs of a
converted development;

(4) the capacity of the
sanitary sewer system is adequate to meet the projected flow requirements of a
converted development pursuant to N.J.A.C.7:14A-23.3.

(5) if additional water
supply or sewer capacity is needed and the developer is unable to obtain
additional supply or capacity, the number of dwelling units in the development
has been reduced accordingly;

(6) if additional parking is
needed, and the developer is unable to provide the required parking, the number
of dwelling units in the development has been reduced accordingly; and

(7) if additional parking is
provided and increases the amount of impervious cover by more than one percent,
the storm water system calculations and improvements have been revised
accordingly.

5. A unit in a converted development
shall conform to all requirements imposed pursuant to the “State Uniform
Construction Code Act,” P.L.1975, c.217 (C.52:27D-119 et seq.). It shall also
conform to any requirements for, and limitations on, size and square footage
imposed pursuant to a preliminary approval. However, any floor plans of the
dwelling units may be revised without requiring any further approving board
approval or review.

6. a. In the case of an
age-restricted development which is being changed to a 1[non-restricted]converted1 development, the
layout of a subdivision or site plan approved pursuant to the “Municipal Land
Use Law,” P.L.1975, c.291 (C.40:55D-1 et seq.) 2[shall
not]may2 be 2reasonably2 revised 2[other than]2 to
accommodate additional parking, different recreation improvements and other
amenities, infrastructure enhancements, a needed reduction in the number of
units, 2
height requirements, revision to dwelling footprints that do not modify square
footage of the development or the individual dwellings,2 or a needed change
to construct the affordable units as attached housing.

b. In order to construct
the affordable units as attached housing, to meet accessibility requirements,
or provide them as rental units, the affordable units may be constructed in one
section of the development with a separate management entity if such a management
entity is required due to the nature of the development.

c. The size, height, 2[footprint]floor area ratio2, number of
bedrooms and 2total2 square footage of
buildings established as part of a preliminary or final approval for an
age-restricted development shall not be increased, but may be decreased for a
converted development, except that the number of bedrooms for the affordable
units only may be increased within the footprint to meet the bedroom
distribution requirements as established in the Uniform Housing Affordability
Controls.

7. a. Within 30 days after
the submission of an amended application pursuant to this bill, the approving
board shall advise the applicant in writing whether the amended application is
complete, with completeness to be determined based upon whether the applicant
has submitted documentation addressing the issues described in section 4 of
P.L. , c. (C. ) (pending before the Legislature as this bill). If
no such writing asserting incompleteness for any such reason is provided to the
applicant within the 30 day period, the application shall be deemed complete
for purposes of review by the approving board.

b. The approving board
shall render a decision on an application for a converted development within 60
days of a determination of application completeness, unless the time frame is
extended by the applicant. If no such decision is rendered by the approving
board within the time period, including extensions, the application shall be
deemed approved and the applicant shall in such a case follow the procedures set
forth in section 5 of P.L.1985, c.516 (C.40:55D-10.4).

c. Applicants seeking
approval for a converted development pursuant to P.L. , c. (C. )
(pending before the Legislature as this bill) shall not be charged application
fees, although reasonable escrow fees may be charged pursuant to section 13 of
P.L.1991, c.256 (C.40:55D-53.2).

8. After a development has
been officially changed to a non-restricted development, the developer shall
file a copy of the revised preliminary subdivision or site plan approval with
the municipal engineer for review and a determination that all site information
is complete. Such information shall be used as the base document for the
calculation of any required inspection escrow accounts, and performance and
maintenance guaranties in accordance with section 41 of P.L.1975, c.291 (C.40:55D-53).
Any reasonable costs for the review of the revised plans may be charged to the
escrow account that the developer posted with the municipality.

9. An application for
approval to change a development from age-restricted to non-restricted status,
pursuant to section 4 of P.L. , c. (C. ) (pending
before the Legislature as this bill), may be submitted to the approving board
at anytime before the first day of the 25th month next following the effective
date of P.L. , c. (C. )
(pending before the Legislature as this bill); provided, however, that the approving
board may extend this time period by an additional 24 months if it finds, at
the end of the initial period, that poor economic conditions continue to
adversely affect the real estate market in New Jersey.

10. All development approvals
for a development that changes from age-restricted to non-restricted status
pursuant to P.L. ,
c. (C. )
(pending before the Legislature as this bill) shall be deemed vested in accordance
with the “Municipal Land Use Law,” P.L.1975, c.291 (C.40:55D-1 et seq.), and
extended as permitted under the “Permit Extension Act of 2008,” P.L.2008, c.78
(C.40:55D-136.1 et seq.). 1In
the case of a prior approval that was not extended as permitted under the
“Permit Extension Act of 2008,” the period of vesting and protection shall not
be less than 24 months from the date of approval of the application to change
to a non-restricted status.1

1[11. a. An approving
board shall issue a resolution of denial within the time period set forth in subsection
g. of section 6 of P.L.1975, c.291 (C.40:55D-10). In the event that an
approving board denies an application for a converted development, an applicant
may appeal that determination to the Smart Growth Ombudsman appointed pursuant
to section 2 of P.L.2004, c.89 (C.52:27D-10.3). Such an appeal shall be filed
within 30 days of the applicant’s receipt of the resolution of denial issued by
the approving board. The Smart Growth Ombudsman shall render a decision as to an
appeal within 60 days of its submission to the Smart Growth Ombudsman. The
notice of appeal shall include the plans and reports, if any, submitted by the
applicant to the approving board in support of the request for approval of a
converted development. No fees will be charged for the filing or processing of
such an appeal.

b. In considering such an
appeal, the Smart Growth Ombudsman shall be guided by a review of whether the
applicant has demonstrated satisfaction of the review criteria set forth in
section 4 of P.L. , c. (C. ) (pending before the Legislature as
this bill). Upon finding that the criteria have been satisfied, the Smart
Growth Ombudsman shall issue approval of the converted development, along with
any reasonable approval conditions deemed necessary by the Smart Growth
Ombudsman. There shall be no right of appeal from decisions issued by the
Smart Growth Ombudsman.]1

111. 2a.2 An
approving board shall issue a resolution memorializing its decision on an
application for a converted development within the time period set forth in
subsection g. of section 6 of P.L.1975, c.291 (C.40:55D-10). In the event that
an approving board denies an application for a converted development or
approves an application subject to conditions deemed unsatisfactory to the
applicant, the applicant may appeal that determination to the court in a
summary manner. Such an appeal shall be filed within 30 days of the
applicant’s receipt of the resolution2[of
denial]2issued by the approving board. The notice of appeal shall include the plans
and reports, if any, submitted by the applicant to the approving board in
support of the request for approval of a converted development, a copy of the
transcript of the hearing before the approving board, and any other items that
comprise the record before the approving board.1

2b. In deciding
an appeal, the court shall consider whether the applicant complied with the
criteria contained in section 3 and section 4 of P.L. , c. (C. )
(pending before the Legislature as this bill). Upon finding that the criteria
have been satisfied, the court may make an order instructing the board to
approve the converted development, along with any reasonable conditions of
approval deemed necessary by the court.2

112. Notwithstanding
any law, rule or regulation to the contrary, a municipality that has received
substantive certification from the council shall be permitted to give
preference for occupancy for up to 50 percent of all available affordable
housing units in a converted development to those households having members who
work or reside in the municipality.1

113. Under any
rental or purchase program implemented to prevent the homelessness of persons
who have experienced or may experience the foreclosure and loss of their
personal residence, or any program which addresses the needs of low and
moderate income households residing within the municipality including, but not
limited to, State, federal or local programs, if the persons benefitting from
the program are otherwise income qualified to occupy such housing under federal
or State law, then affirmative marketing requirements under regulations
promulgated to effectuate the “Fair Housing Act,” P.L.1985, c.222 (C.52:27D-301
et al.) shall be waived to permit such persons to occupy, rent or purchase the
housing units which they may have previously occupied or owned.1

114. For the
purpose of determining credits to be granted against the fair share obligation
of a municipality under the requirements of P.L.1985, c.222 (C.52:27D-301 et
al.) and the regulations promulgated to effectuate that act, a housing unit
financed in whole or in part through the allocation of federal Low-Income
Housing Tax Credits shall be eligible to be credited if the requirements of federal
law pursuant to 26 U.S.C. s.42 have been met for that unit. In the event the
federal requirements have been met, the provisions of the Uniform Housing
Affordability Controls promulgated by the New Jersey Housing and
Mortgage Finance Agency shall not be applied to inhibit or prevent the
crediting of the housing unit against the municipal fair share obligation.1